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Understanding Bequest Motives An Empirical Analysis of Intergenerational Transfers

  • G�nther Fink
  • Silvia Redaelli

This paper analyzes one of the major factors underlying old agents' saving and consumption decisions - the individual intentions to leave bequests. We present two simple model of altruistically motivated bequests and use data from the Health and Retirement Study (HRS) to confront the theoretical implications of the two model with empirical evidence from the survey data provided. The main findings from the data are the following: First, there is strong evidence against a strictly accidental, and in favor of intentional bequest motive for a significant share of agents aged sixty and older. Second, we find the probability to leave an inheritance is mainly driven by wealth and individual characteristics such as health, education, race and religion, but not directly dependent on the heirs' wellbeing, contradicting the standard altruistic model of bequest.

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Paper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 042.

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Date of creation: May 2005
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Handle: RePEc:dnb:dnbwpp:042
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  1. Roberta Gatti, 2005. "Family Altruism and Incentives," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(1), pages 67-81, 03.
  2. Tullio Jappelli & Marco Pagano, 1997. "The Determinants of Savings: Lessons from Italy," Research Department Publications 3012, Inter-American Development Bank, Research Department.
  3. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier.
  4. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-32, August.
  5. Masson, A. & Pestieau, P., . "Bequests motives and models of inheritance: A survey of the literature," CORE Discussion Papers RP -1273, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  7. Oded Galor & Omer Moav, 2000. "Das Human Kapital," Working Papers 2000-17, Brown University, Department of Economics.
  8. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 1001-1026.
  9. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S151-82, July.
  10. Michael Hurd & James P. Smith, 2002. "Expected Bequests and Their Distribution," NBER Working Papers 9142, National Bureau of Economic Research, Inc.
  11. Laitner, John & Ohlsson, Henry, 1998. "Bequest Motives: A Comparison of Sweden and the United States," Working Paper Series 1998:16, Uppsala University, Department of Economics.
  12. Jagadeesh Gokhale & Laurence J. Kotlikoff & James Sefton & Martin Weale, 1999. "Simulating the Transmission of Wealth Inequity via Bequests," NBER Working Papers 7183, National Bureau of Economic Research, Inc.
  13. Gary S. Becker & Nigel Tomes, . "Human Capital and the Rise and Fall of Families," University of Chicago - Population Research Center 84-10, Chicago - Population Research Center.
  14. Abel, Andrew B, 1985. "Precautionary Saving and Accidental Bequests," American Economic Review, American Economic Association, vol. 75(4), pages 777-91, September.
  15. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
  16. Kessler, Denis & Masson, Andre, 1989. "Bequest and Wealth Accumulation: Are Some Pieces of the Puzzle Missing?," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 141-52, Summer.
  17. Nordblom, Katarina & Ohlsson, Henry, 2002. "BEQUESTS, GIFTS, AND EDUCATION Swedish evidence on parents’ transfer behavior," Working Papers in Economics 69, University of Gothenburg, Department of Economics.
  18. Lutz Hendricks, . "Intended and Accidental Bequests in a Life-cycle Economy," Working Papers 2133407, Department of Economics, W. P. Carey School of Business, Arizona State University.
  19. McGarry, Kathleen, 1999. "Inter vivos transfers and intended bequests," Journal of Public Economics, Elsevier, vol. 73(3), pages 321-351, September.
  20. Michael D. Hurd & James P. Smith, 1999. "Anticipated and Actual Bequests," NBER Working Papers 7380, National Bureau of Economic Research, Inc.
  21. Tullio Jappelli & Franco Modigliani, 1998. "The Age-Saving Profile and the Life-Cycle Hypothesis," CSEF Working Papers 09, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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